Andrew here. Wowsers. Wall Street is buzzing about an opinion essay in The Wall Street Journal by Stanley Druckenmiller, a billionaire investor. Druckenmiller criticized Treasury Secretary Scott Bessent’s bond buyback plan, calling it a mistake — and, worse, suggesting it’s a stab at manipulating the bond market.
Remember that Druckenmiller more recently employed Kevin Warsh, now the Fed chairman, who has argued that the government should intervene less in markets, not more. Read more below.
The risks of Bessent’s multifront war
Treasury Secretary Scott Bessent has spent much of August trying to talk down bond yields and, as he described it, “tightening the noose” around Iran’s economy to bring the country to heel.
But Bessent’s efforts have put his credibility with the markets at risk. And among his newest critics is a former mentor, the billionaire investor Stanley Druckenmiller.
Bessent’s dilemma was on display on Monday. He held a news conference in Washington, threatening Tehran and its allies with bruising new sanctions. But details of “Operation Economic Fury,” as the administration is calling it, were sparse.
Bessent dialed down the hard-line tone he used on Sunday, in which he threatened an “economic D-Day” on Iran and countries that do business with it. Instead, he suggested on Monday that “quiet diplomacy” would be the best way to persuade countries to cut trade ties with Tehran.